UK Crypto Influencers Fail Compliance Tests as Regulators Tighten Rules
Crypto influencers are facing scrutiny from UK regulators over compliance issues related to promoting cryptocurrency trading platforms. An analysis of 57 social media posts on TikTok and Instagram found that 89% contained at least one potential compliance issue.
The most common weaknesses were a lack of risk disclosure, with only 44% of posts mentioning the financial risks associated with cryptocurrency trading. This rose to 69% on Instagram, compared to 43% on TikTok.
Other issues included failing to provide a balanced view of potential returns and losses (40%), not clearly labeling content as advertising or sponsored (54%), and promising guaranteed investment returns (11%).
The Financial Conduct Authority is preparing to introduce new regulations for crypto firms, including stronger requirements around financial resilience and market integrity. The regulator has found that 29% of people who buy cryptocurrency use social media as part of their research beforehand.